The camera sees everything. Clothing, and looking good on camera, is an essential part of producing YouTube videos. So surely clothing is tax-deductible, right? Unfortunately, it is a little more complicated than you would think.
YouTubers Can’t Generally Deduct Clothing
As with most tax rules and guidelines, there are some exceptions to the rule. However, in most cases, YouTubers can’t deduct regular clothes as part of an expense. This is especially the case if you are wearing them off-screen or for leisure.
This may be disappointing, but it makes sense. You need to wear clothing to live in modern society, so this isn’t really a business expense. As such, the tax-man doesn’t consider this as something you can deduct. It isn’t contributing towards the business in a meaningful way.
Some Clothes Are Deductible
Things become a little more complicated when we consider clothes that are essential to your job. Outside the world of YouTubing and influencers, there are some clear cut examples that we can point to. Uniforms are the most obvious – if a uniform is required for work, and you are the one to pay for it, then that expense is something you can claim. The same goes for personal protection equipment like gloves and overalls.
Obviously, there are no specific uniforms for YouTubers – or are there? Think about some of your favourite influencers on YouTube. There is often a specific look associated with their brand. Think about a hat that is worn on every video and to every business meeting. Is this not in some way a uniform?
Clothing Essential to Your Image is Deductible
If an item of clothing is essential to your image as a YouTuber or influencer, then we consider that item of clothing tax-deductible. If you have a dinosaur t-shirt that you wear every video and people know you for, then that is part of your image. If you wear a piece of clothing that contributes to your image, then this counts. Obviously, this distinction gets a little complex.
Formalwear for Certain Events
Formalwear like ball gowns and tuxedos are sometimes deemed as tax-deductible, as they contribute towards your business. However, this isn’t always the case. If you have won an award, and need to purchase some fancy clothes so you fit in at the ceremony, then, by all means, deduct the new clothing as an expense. If you are buying a tuxedo to go out on a date, then this is not something you can claim.
The Fine Line
There is a fine line between what is deductible and what isn’t, and it can be fairly complex. It can be tempting to just not deduct anything, for fear of the tax-man knocking on your door. It can also be tempting to deduct every last sock and shirt to try and save as much money as possible. Knowing how much to claim is an art and a science. This is where The Showbiz Accountant comes in.
The Showbiz Accountant specializes in taxes and accounting for people in the entertainment industry. We know showbusiness and how taxes work for unique cases, like influencers and YouTubers. With our fixed monthly rates, you can figure out exactly how much to claim each year, and we will always be on the end of the telephone with a specialist, so you can deduct as much money as you can while focusing on the things that really matter – like making amazing YouTube videos.